K Mortgage Terms | Oconee County Real Estate
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Margin
A fixed amount that is added to the Index which the
mortgage is tied to, to calculate the Interest Rate
that you will pay for an Adjustable-Rate Mortgage. If,
for example, the Index is 6% and the Margin is 2%, the
Interest Rate for that period is 8%. The Margin is the
same throughout the life of the mortgage.
Maturity
The date on which the principal balance of a loan, bond,
or other financial instrument becomes due and payable.
Mortgage Banker
A Company that originates mortgage loans and uses their
funds to close the loan in their name.
Mortgage Broker - see Broker
Mortgage
Insurance (MIP or PMI)
Insurance purchased by the borrower to insure the lender
or the government against loss should you default. MIP,
or Mortgage Insurance Premium, is paid on government-insured
loans (FHA or VA loans) regardless of your LTV (loan-to-value
ratio). Should you pay off a government-insured loan
in advance of maturity, you may be entitled to a small
refund of MIP. PMI, or Private Mortgage Insurance, is
paid on those loans which are not government-insured
and whose LTV is greater than 80%. When you have accumulated
20% of your home's value as equity, your lender may
waive PMI at your request. Please note that such insurance
does not constitute a form of life insurance which pays
off the loan in case of death.
Mortgage Insurance Premium (MIP)
The amount paid by a mortgagor or mortgage insurance,
either to a government agency such as the Federal Housing
Administration (FHA) or to a private mortgage insurance
(MI) company.
Mortgage Loan
A loan which utilizes real estate as security or collateral
to provide for repayment should you default on the terms
of you loan. The mortgage or Deed of Trust is your agreement
to pledge your home or other real estate as security.
Mortgagee
The lender in a mortgage loan transaction.
Mortgagor
The borrower in a mortgage loan transaction.
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